Friday's Personal Finance stories

It doesn't take a whole lot of smarts to figure that when times are as tough as they are now people are going to look to their savings to tide them over. And given that most Americans don't have much in the way of emergency funds to dip into, when the wolf is really at the door, retirement accounts are the ones that are going to get eaten.

And you also don't have to be a genius to understand that tapping those retirement accounts is a bad idea, especially once you get the bill for taxes and penalties. Even Congress, which has been known to raid an account or two, knows that much.

As obvious as all that is, Congress found it necessary to order a study to confirm it. The report, out Friday from the Government Accountability Office, hammers home the point that cashing out of 401(k) and other tax-advantaged plans or letting even small amounts of money "leak" out of these accounts has huge long-term consequences.

It doesn't make much sense to spend money on studies scolding us about poor savings behavior. We wouldn't be forced to make those bad choices if the effort instead went into repairing the job market.

A forthcoming federal report on retirement savings recommends easing a penalty for hardship withdrawals from 401(k) plans and that workers receive better education about the consequences of such decisions. See full story.

The right way to save

Pat yourself on the back. Government data show that in the face of the financial crisis, we have reduced our debt, cut our spending and, by one measure, boosted personal savings to the highest level this decade. So now that you're back on track, how are you going to make the most of your hard-won reserves? See full story.

Putting your emergency money in blue chips

The Federal Reserve confirmed this week that it's going to keep interest rates low for a long time. That may help the recovering U.S. economy, but it poses a problem for savers. Cash accounts -- from money markets to banks -- are paying next to 0% interest. Certificates of deposit and bonds aren't offering much more. If you're saving money, or if you need income, where can you find better returns? One option that's worth a look: blue-chip stocks. See Brett Arends.

REAL ESTATE

Here's what should happen when you pay off your mortgage

Can you write an article on what takes place when a mortgage loan is paid off? Shouldn't a deed or title be exchanged and should it have to be recorded with the county in which you reside? See Realty Q&A.

New-home sales flatten out in August

Despite a record drop in prices, sales of new homes flattened out in August after four months of strong increases, the Commerce Department estimated Friday. See Economic Report.

INVESTING

Fannie Mae beckons, but the stock is no buy

As the Dow Jones Industrial Average approaches 10,000 again, many issues that would have been passed off as toxic waste less than a year ago are now being passed along to investors as bargains, values and trading opportunities. Nowhere is that more evident than with Fannie Mae, the troubled mortgage-securities company that was a poster child for the market meltdown, going from big-time safe play to risky penny stock. See Chuck Jaffe.

SEC commissioner backs funds in fee case

One of the top mutual-fund regulators said Thursday he is concerned about courts having more say in whether fees are too high. See Fund Watch.

Fallen fund stars find fewer takers

Some prominent mutual funds have made spectacular comebacks this year, but the investor dollars aren't following. See full story.

HEALTH CARE

Debate over elderly marks testy Senate health session

Members of the Senate Finance Committee on Thursday rejected Republican amendments related to the elderly in a sometimes-testy work session on a sweeping health-care bill, as Democrats were buoyed by the appointment of an interim replacement for health-reform advocate Edward Kennedy. See full story.

The undecided may make difference in health care

Jerry Seib discusses who will ultimately determine the fate of the health-care debate. Watch Video Report.

CONSUMERS

Consumer sentiment soars in final September reading

U.S. consumer sentiment improved markedly in late September, boosted by a sense that the recession is finally over, according to a survey released Friday by the University of Michigan and Reuters. See Economic Report.

Banks face curbs on fees

The U.S. banking industry's signs of retreat on certain account fees mightn't satisfy Washington lawmakers, including some who said Wednesday they are pushing ahead with broad restrictions on fee policies at banks. See full story.

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